Small business owners can apply for payroll protection through CARES Act

Third Street in downtown Baton Rouge

March 30, 2020 at 11:21 AM CDT - Updated April 6 at 8:03 PM

BATON ROUGE, La. (WAFB) - The Baton Rouge Area Chamber (BRAC) released five tips for small business owners in Louisiana.

TIPS FROM BRAC

If you closed because of the governor’s Stay at Home order, but aren’t sure if your business qualifies as essential, call the Louisiana Department of Economic Development to ask at 833-457-0531 or via email at LEDbiz@la.gov. There are many businesses allowed to remain open, but must do so following safety protocols.

Call your bank and ask for advice. Tell them what’s going on at your business and ask them if there’s anything out there that can help you.

Call your landlord or mortgage bank and ask if they are offering any temporary relief from owing rent or mortgage payments. Most banks and credit unions are right now, usually, it’s case-by-case that they consider when called. Do the same for other creditors.

Go to www.SBA.gov/disaster - The CARES Act passed and was signed into law on March 27. The package includes several provisions for small businesses, including the Paycheck Protection Program (PPP), forgivable loans of up to $10 million, with interest rates no higher than 4%, made directly by private local banks and CDFIs. The loans are forgivable if they are used on payroll and other defined operating expenses in a defined time period. These provisions mean that businesses that have had to furlough or lay people off can rehire those employees and use the PPP to cover payroll. The CARES Act also provides for SBA Economic Injury Disaster Loan Advances of $10,000, which must be delivered to applicants within three days, and which can be rolled into PPP loans. Finally, Economic Injury Disaster Loans (EIDL), available at rates of 3.75% for up to $2 million, were made available prior to the CARES Act’s passage. EIDLs can also be used on payroll and other defined operating expenses, but are not forgivable. It is important to note that while businesses can apply for and receive both a PPP and EIDL, they cannot be used for the same purpose.

If you have laid off someone or cut back their hours or furloughed them for a while, please give them information about unemployment insurance. Tell them to seek information and an application from the Louisiana Workforce Commission. You can also talk to your accountant and get some financial assistance in new tax credits that passed Congress.

The Payroll Protection program is designed to get cash in the hands of suffering small businesses quickly, with less red tape and fewer guardrails than the SBA’s existing loan programs. Business groups say lenders are moving as fast as they can to make the loans available. An overview of the Paycheck Protection Program can be found here. An information sheet for borrowers can be found here.

Starting April 3, small businesses and sole proprietorships can apply. Starting April 10, independent contractors and self-employed individuals can apply. Applicants are encouraged to apply as quickly as possible because there is a funding cap. The application for the Payroll Protection Program can be found here.

Gov. John Bel Edwards is encouraging small business owners across the state to immediately apply for assistance with payroll, rent, and other operational expenses through the federal Paycheck Protection Program, if they have not already done so. The federal loan program is being made available to them through their Louisiana based financial institutions. Simultaneously, Gov. Edwards says all Louisiana banks should continue pursuing access to those federal dollars and to be patient as the program moves forward. The Paycheck Protection Program is administered through the Small Business Administration (SBA) and is designed to help small businesses meet their operational needs during this coronavirus pandemic.

“The rollout out of the $349 billion through this program comes at a critical time for our state as we face this public health crisis, but it will not last long as businesses across the country will also apply, which is why our small businesses should not wait for the glitches in the system to be worked out before filling out their applications,” said Gov. Edwards. “Time is of the essence and the time to move is now.”

MORE RESOURCES FROM BRAC

Webinars to benefit small business owners currently scheduled include:

A webinar “Bringing clarity to the PPP with the latest information. Explaining the federal coronavirus aid package and answering your questions,” with panelists U.S. Rep. Garret Graves and Renée Bender will be hosted by the Baton Rouge Business Report